Resource Generation said that it had made progress with its plan to mine in the Waterberg region, which has one of the country’s largest remaining coal deposits.

In its report for the March quarter, JSE and Australian Securities Exchange listed Resource Generation said it was developing its Boikarabelo coal mine, aiming to produce 6 million tonnes of coal annually, of which half would be export quality.

The balance would be domestic quality coal, for sale to power utility Eskom. The mine will be operated by the Ledjadja joint venture, in which Resource Generation has a 74% shareholding. It said Ledjadja was granted a 30 year mining right by the Department of Mineral Resources. Formal documentation and establishing a USD 2 million rehabilitation deposit are due to be completed by Easter.

Resource Generation is raising ZAR 4.5 billion to fund the first phase of the mine. It also needs ZAR 2.5 billion for rail from the mine and infrastructure. It wants to raise 40% through equity and the rest through debt.

The company said it wanted to start production in January 2013.

The second stage is set for 2018 and will increase output to 40 million tonnes of annual run of mine production. This would make for export volumes of about 20 million tons a year. This product would be railed out of the Waterberg region. Some coal would be sold to Eskom, which wanted to use it for its power stations inWitbank and Middelburg. In researching how it would export coal out of SA, Resource Generation is looking at three east coast ports: Durban, Maputo in Mozambique and Richards Bay.

(Sourced from Business Day)